Tiny Hawaiian Island Will See if New Owner Tilts at Windmills

Adam Nagourney|The New York Times

Thursday, 23 Aug 2012 | 2:29 AM ETThe New York Times

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Lanai should be the very picture of tropical tranquillity, the kind of Pacific island where Gilligan set ground. Just 3,135 people live on its 141 square miles. There are no traffic lights, movie theaters or bakeries. There is just one gas station and three main roads. It is ringed with vast and empty beaches, accessible only by four-wheel drive. A visitor can roam its hills for hours without encountering another living being.

Ron Dahlquist | Perspectives | Getty Images

Hawaii, Lanai, aerial view of Puu Pehe, Sweetheart Rock.

Yet for all its seeming serenity, Lanai — a privately owned island in easy sight of Maui’s western shore — is torn these days by economic and cultural conflict, struggling with its identity and an uncertain future after its reclusive residents learned that their island had been sold to the reclusive billionaire owner of a software company.

Since James Drummond Dole bought Lanai from a rancher 90 years ago, the island has undergone a series of wrenching economic transformations. Under Dole, it became the world’s largest pineapple plantation, known as Pineapple Island, with bristling fields and a colony of workers. When Dole moved its operations overseas in the late 1980s, Lanai turned to tourism, opening two high-end resorts where rooms go for as much as $1,100 a night, providing a new source of employment for this community.

But when those resorts struggled with the recent economic downturn and the challenge of bringing tourists to a remote island with single-propeller air service, the island’s owner proposed building a field of 45-story turbine windmills, across bluffs and beaches covering over a quarter of the island, to produce energy to sell to Oahu. The plan polarized residents, dividing those who saw the turbines as the economic salvation of their struggling island from those who treasured its wild and undeveloped isolation.

“It’s awful, just awful,” said Robin Kaye, one of the opponents, sweeping his arm across the land where the windmills would rise, a tumble of otherworldly rock formations framed by views across the Pacific to Maui and Molokai. “There are families who won’t talk to each other anymore. It has really ripped us up.”

Lanai’s new owner is Larry Ellison, a co-founder of Oracle. He bought 98 percent of the island — the remainder is government property and privately owned homes — six weeks ago from David H. Murdock, another billionaire, whose holdings include Dole and who was the force behind the windmill proposal. The price was not disclosed.

Mr. Ellison now owns the gas station, the car rental agency and the supermarket. He owns the Lanai City Grille, the Hotel Lanai, the two Four Seasons resorts, two championship golf courses, about 500 cottages and luxury homes, a solar farm, and nearly every single one of the small shops and cafes that line Lanai City. He owns 88,000 acres of overgrown pineapple fields and arid, boulder-strewn hills, thick with red dust, as well as 50 miles of beaches.

But Mr. Murdock is not quite gone. As part of his deal, he retained the option to build the windmills should he win the requisite approvals. That was viewed here as one final anxiety-causing shot at his Lanai neighbors.

For all the speculation about Mr. Ellison’s intentions — the most prevalent being that the new owner, whose team of yachts won the America’s Cup in 2010, would turn Lanai into a hub for sailing — he has yet to appear in public, speak with elected officials or tell anyone what he might have in mind. He did not respond to a request for comment.

“Everybody is basically in the dark,” said Mary Charles, who runs the Hotel Lanai. “It’s been a very tough struggle for Lanai for the past five years.”

Alberta De Jetley, publisher of Lanai Today, a monthly newspaper, said islanders were feeling measured hope after the turmoil of Mr. Murdock’s reign. “We have a wonderful island,” she said. “We just need a little help.”

Not surprisingly, given the history here, the welcome mat is not entirely out.

“Hey, Larry!” Sally Kaye, a former prosecutor and Mr. Kaye’s wife, wrote in an open letter to the new owner that was published by Honolulu Civil Beat, a news site. She described Lanai as an island that had “been owned and exploited by one really rich guy or another” for 150 years and whose residents live in a “medieval lord-of-the-manor system of control.”

Mr. Murdock’s tourism push had been a bust, she wrote, “in part because we have very little water on Lanai. I’m sure your due diligence uncovered that little factoid, yes?”

“We (who live here, this being our only home) don’t view this as a negative, it’s simply a limitation on uncontrolled growth, which we see as a good thing,” she wrote. “Hope you do, too.”

Ms. Charles said she was “appalled” at Ms. Kaye’s letter and published her own welcome to Mr. Ellison in The Honolulu Star-Advertiser.

“There is a small group here that is still very anti-growth and scared of future development,” she said over breakfast in her hotel dining room.

For all the mystery surrounding Mr. Ellison, the change of the feudal guard seems to offer the prospect of a new start for the island. Mr. Murdock, who did not return a request for comment, was demonized for reasons big and small. His worst offense might have been closing the community pool (yes, he owned that, too) as a cost-saving measure.

One of Mr. Ellison’s first acts was to reopen the pool. And the placards supporting the windmills that Mr. Murdock had placed in front of his company headquarters have vanished.

“Ellison will have a much better chance of success because he is coming in new and doesn’t have a built-in antagonistic base that is fighting him,” said Alan M. Arakawa, the mayor of Maui County, which includes Lanai. “He’s making good first impressions. He is working with the community, rather than going in there and slashing and burning.”

Mr. Ellison’s associates describe him as drawn by the romantic mystery of a secluded island and said it was unlikely that he would embark on any project that might alter its character. His assistants have told people here that he intends to do a major renovation on the two resorts, suggesting that he sees the island’s future in tourism, and described this as “a passion purchase.”

The other day, workers could be seen at the Four Seasons at Manele Bay, the oceanfront hotel and golf course where Bill and Melinda Gates was married, installing dozens of new planters and plantings.

Ms. Charles represents a segment of the island that views modest growth as essential to its survival; the island’s population, she said, should be closer to 5,000 people. And she is open to the idea of the windmills.

“They are not wonderful,” she said. “The first month or two, it will be, ‘Oh my God, those windmills.’ And then a year later, it will be, ‘Oh yeah, the windmills are over there.’ ”

Mr. Kaye, 65, has lived on and off on Lanai since 1974 and celebrates an existence where supplies come in once a week by barge and people routinely take a ferry to Maui to shop.

“One of the keys here is to promote tourism,” he said. “But to do it in a way that is sensitive to what we are: We are a beautiful, small and unique Hawaiian community. We are not Waikiki.”

Ms. Charles said that the remoteness made it harder to run a business, and that people here “would welcome more development — in the right manner.”

“Ellison might have saved our community,” she said. “We were dying. The situation was at near crisis. Some of the local people don’t want to believe that.”